Whether you know it or not, your pension may be gambling on highly-speculative life settlement funds which profit when people die prematurely from COVID. Life settlement funds are controversial for a host of obvious and not-so-obvious reasons.

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These investments in a pension ensuring the retirement security of workers is doubly problematic. Many public and private pensions are gambling on highly speculative funds that invest in so-called “longevity-contingent assets,” such as life insurance policies insuring the lives of individuals who are generally at least 70 years old.

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The insured individual must have a life expectancy ranging from, say, not less than two years to not more than 15 years. A given fund may have exposure to hundreds of lives in the portfolio with an average insured age of over 80 years old.

The sooner the terminally ill and other elderly insured individuals die, the better—as far as your pension is concerned. With more than 80% of COVID deaths in the United States occurring in people aged 65 and older, this should be the best of times for gambling on these controversial funds which often promise annualized returns ranging from 8-12%. (Actual net returns are likely to be less than half those promised.) If so, would it comfort you to know your pension was profiting from the misery of others?

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